In a study sponsored by the National Council on Economic education, 66% of high school students tested on basic money skills scored an “F”. Only 3% got an “A”. This isn’t the only survey that shows that kids lack money sense. Yet, Teenagers are spending about $100 billion of their own money each year and influence an additional 50% of their family spending. That is a lot of purchasing power for a group with little knowledge on how to spend and save wisely.
How many of us were taught how to be financially responsible as children? Statistics show that very few of us had proper education on how to manage our money. Our parents didn’t explain it to us, nor did the educational system. Perhaps that is why the United States savings rate is so low – only one half a percent of what we make. That puts us at the bottom of the list of industrialized countries. In fact, today Americans have the lowest savings rate in history since the Great Depression.
Good habits are established when we are young. Studies indicate that most kids develop their money habits by age 13. So what better time to teach children about money, than when they first start to ask for things that cost money. If they can count, then they are old enough to learn about money.
Children may know that money does not grow on trees, but not know the fundamentals needed to thrive in a consumer driven society. The sooner they learn that money must be earned through hard work, saved, and spent wisely by each member of the family, the happier and more productive they will be. We can begin teaching children about basic money principals when their toys cost $2 instead of $200 or $2,000.